Scholar/Authors Discuss Their Books on Preemption, Part Two

by Matthew Freeman

Editor’s Note: Following is the second of several posts focused on federal preemption issues and featuring CPR Member Scholars Thomas McGarity and William Buzbee.  In December, both published books on the issue.  (The first blog post in the series includes some background on the issue.)  McGarity’s book is The Preemption War: When Federal Bureaucracies Trump Local Juries.  Buzbee’s is Preemption Choice: The Theory, Law, and Reality of Federalism's Core Question, and features chapter contributions from 15 experts, including Buzbee and McGarity, as well as a number of other CPR Member Scholars.


We asked Professors McGarity and Buzbee to discuss the books and the issue, and here’s the second installment of that conversation:

 

What are the stakes for individuals in this?

Professor McGarity:  Ordinary folks have a tremendous stake in the outcome of what I call the “preemption war” because federal regulation directly affects many of the products and activities that we encounter in our daily lives.  The Wyeth case that is currently pending before the Supreme Court involves prescription drugs that we all take for all sorts of medical conditions.  If Wyeth gets a broad ruling from the Supreme Court that approval of a company’s label preempts all lawsuits against drug companies for failing to warn of adverse side effects, people who are damaged by a drug company’s failure to disclose risks to FDA and their doctors will lose their in court.  Currently pending cases against the manufacturers of Vioxx, Paxil, Rezulin and dozens of other drugs will simply go away.

The courts have applied federal preemption broadly to many other products that are regulated by federal agencies, including automobiles, motor boats, children’s toys, flammable fabrics, and consumer products like BIC cigarette lighters, pesticides, and hazardous household chemicals. 

All of these products are regulated by federal agencies, but many of the regulations are not very stringent, and most have not been updated in years or even decades.  The federal standard for flammable clothing, for example, is more than 50 years old and can be met by a piece of newspaper.  If lawsuits against product manufacturers are preempted by ancient regulations, then the victims will not be compensated for egregious malfeasance and companies will have little incentive to improve their products as safer technologies become available.

Preemption also extends to services we depend upon, like financial services, credit reporting, airline and railroad safety, and even health care. 

Consider the case of Buddy Kuhl.  His doctor recommended that he see a heart specialist after he suffered a serious heart attack.  After two different specialists recommended that he undergo heart surgery at a St. Louis hospital, his health plan’s “utilization reviewer” refused to pre-certify the procedure.  Because Mr. Kuhl could not afford to pay for the operation out of his own pocket, the surgery was canceled.  After a third specialist joined the first two, the reviewer acquiesced.  But by then Buddy’s heart had deteriorated to the point at which surgery was no longer a feasible option.  When the St. Louis specialist recommended a heart transplant instead, the plan refused to pre-certify that surgery.  Mr. Kuhl died three months later.  His wife’s wrongful death lawsuit, however, was dismissed because it was preempted by an obscure federal law regulating employer-provided pension plans that was intended to prevent employers from shirking their employee pension obligations.


Because we are all potential victims of the kind of injustice suffered by Buddy Kuhl, we should pay careful attention to this important legal issue.

Professor Buzbee:  I agree that new aggressive assertions of preemptive impact of federal action will have substantial effects on ordinary citizens.   Some of this impact will be direct, with citizens losing the ability to pursue a remedy in court when they are injured by an unduly dangerous product.   I'd add, however, that one of the goals of both of our books is provide some balance for anyone thinking about preemption, whether that person is a citizen, a professor, a legislator, an agency official, or a judge or Supreme Court justice.   Despite the long existence of a "presumption against preemption," the Supreme Court has only sporadically mentioned or applied it.  And where the Supreme Court and agency officials talk about the choice of whether to preempt state law, there has been a more developed set of rationales in favor of preemption than against it.  Pro-preemption actors often talk about concerns with patchworks of regulation, of inconsistent or duplicative requirements, and of state regulation or common law regimes "unsettling" a balance struck in federal law.  In short, so-called "rule of law" values favoring certainty seem to weigh in favor of preemption.  Sometimes, regulatory challenges do justify preemption for these reasons.  But those occasions are rare, usually limited to setting of clashing physical mandates or settings where disparate regulations can cause huge production cost inefficiencies due to lost economies of scale.


The Preemption Choice book, and Tom McGarity's book, both provide an array of countervailing rationales for preserving the possibility of concurrent federal and state regulation, especially concurrent federal regulation and state common law regimes deterring risk and providing remedies for those injured.   The choice whether to preempt or not preempt looks quite different when one assumes not an ideal hypervigilant federal regulator, but the far less glowing reality.  In fact, as long documented in legal and political science scholarship, as well as occasional investigative journalism, the more common reality is that one finds  antiquated federal laws and regulations, underfunded and understaffed federal agencies, spotty to nonexistent enforcement of the law, and federal approvals of products or actions that are not actually endorsing something as the best but merely good enough at the time.  Interest group pressure to not enforce the law or leave it lax is pervasive.  Where federal law or regulation concerns a rapidly changing challenge like climate change, the argument for retaining room for numerous legal actors is even more pressing.   A regulatory monopoly, relying on only one federal actor, is a recipe for stasis, lack of experimentation, and unresponsive regulation.   If, however, state and federal regulators retain overlapping roles, and lawyers working in common law settings can scrutinize the safety or risk despite some past federal action,  then the risk of stasis is substantially reduced.   These are all countervailing concerns weighing in favor of non-preemptive regimes.

 



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